2 Canadians charged in drug money scheme

SANTA ANA, Calif. 
Two Canadians were arrested on suspicion of selling marijuana and ecstasy in the U.S. and spending the proceeds on cocaine they planned to smuggle to Canada, federal authorities said Friday.

Immigration and Customs Enforcement said June Jie Zhang, 31, of Toronto, and John Philip Co, 41, of Richmond, British Columbia, were arrested Wednesday night in Southern California. Both men are charged with conspiracy to distribute cocaine.

Authorities said Zhang and Co worked for a Canadian drug ring that sold marijuana and ecstasy in the United States and sought to launder the money by buying cocaine and smuggling it back to Canada.

Federal agents posed as brokers for Mexican cocaine traffickers to collect $750,000 in two separate payments for 37 kilos of cocaine, authorities said, adding that the men may have laundered more than $15 million in drug proceeds in the last year.

"Money laundering can take many forms, but it's unusual to find a scheme where suspects seek to cover their tracks by using criminal proceeds to buy more contraband," Claude Arnold, special agent in charge for ICE Homeland Security Investigations in Los Angeles, said in a statement.

Co was due to appear in federal court in Santa Ana on Friday. A message was left for his attorney.

Zhang was due to appear in court on Monday. It was not immediately clear if he had an attorney.